Corporate Giving Predicted To Increase 3% This Year

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For the first time in five years, corporate leaders expect their companies' charitable giving to increase--by 3 percent this year and 5 percent next year, according to an annual Conference Board survey.

Thanks to a strong increase in corporate profits last year, the report says, survey respondents were more confident that their companies will make more money available for philanthropies.

The New York City-based Conference Board, whose members are senior executives from various industries, mailed surveys to about 3,800 large and midsize manufacturing and service companies. The findings in the group's report, released earlier this month, are based on responses from 383 corporations. Those corporations are responsible for about one-third of all corporate gifts reported to the internal Revenue Service in 1994.

But an annual analysis of giving published this month by the Foundation Center, also based in New York, paints a slightly more conservative picture.

While the report from the Foundation Center also points to a rebounding economy, increases in corporate profits, and improved stock-market conditions as positive indicators for long-term growth in all foundation giving, it notes that there is a "new uncertainty" about future federal tax policy that could affect giving.

Its report, an analysis of grantmaking in 1993, projects that corporate philanthropy will remain flat over at least the next year. In recent years, corporate giving has failed to keep pace with inflation, increasing only 1 percent in 1993.

"After years of growth, fewer companies are forming new foundations, and many of the leading corporate giants have been reduced in size, leaving prospects for giving highly uncertain," the Foundation Center report says. "Overall, future activity levels will depend on sustained corporate profits, a strong recovery, and a renewed commitment to replenishing foundation resources."

Not at Odds

Loren Renz, the vice president for research at the Foundation Center, said its report and the Conference Board survey are not necessarily at odds. "When you are estimating, you are really trying to leave a spread there for a possible change, and that's a very small spread between 4 and 5 or 6 percent. Our estimate is from a much tinier percentage, so we tend to be more conservative about it."

The Annenberg Factor

In recent years, corporate foundations have been giving away more in grants than they have received back from their companies, Ms. Renz said. "Until those funds are replenished or their assets rise notably in value, the capacity to generate a big increase in grants out is more limited," she said.

Giving by all sectors--corporate, community, and independent philanthropies--increased from $10.2 billion to $11.1 billion in 1993, an 8.9 percent increase. The most significant increases in giving were by community foundations at 13 percent, and the largest independent foundations at 11 percent.

Among the factors cited by the Foundation Center in the $900 million increase were gifts by philanthropist Walter H. Annenberg that amounted to nearly $400 million and increases in gifts to foundation endowments, moderate growth in the value of their assets, and the steady creation of more foundations.

Vol. 15, Issue 04, Page 7

Published in Print: September 27, 1995, as Corporate Giving Predicted To Increase 3% This Year
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